Britain has reportedly given up on the 'have cake and eat it' Brexit deal Theresa May promised to deliver

LONDON — British officials have reportedly ditched the "have cake
and eat it" approach to Brexit negotiations amid a collective
realisation that this sort of divorce deal is not achievable.

Well-placed sources within government have told The Guardian
newspaper that the Department for Exiting the EU (DexEU) now
accepts that Britain must choose between privileged market access
and political control in Brexit talks with the European Union.

This change in mood within government represents a clear
departure from the early negotiating position adopted by Prime
Minister Theresa May, which was based on Britain leaving the EU's
core institutions but retaining the benefits of the being part of
them.

In her Lancaster House speech earlier this year, May suggested
that Britain would be able to negotiate a Brexit deal based on
full access to the European single market without concessions
over immigration and payments to the EU.

The prime minister's rhetoric echoed that of Brexiteers like
Foreign Secretary Boris Johnson, who in the run-up to last year's
in-out referendum said Britain would "have its cake and eat it"
in exit negotiations with the 28-nation bloc.

This optimism has seemingly made way for a more realistic
approach, with civil servants reportedly presenting government
ministers with a binary choice:

A deal based on preferential access to the EU single market
but with clear compromises over issues like immigration and the
role of European courts, similar to that of European Economic
Area (EEA) nations like Norway.

Or a deal based on "taking back control" of immigration and
cutting all ties with European courts but with a much less
lucrative trade relationship with the EU.

"We have a problem in that really there are only two viable
options," an official told the Guardian. "One is a high-access,
low-control arrangement which looks a bit like the EEA. The other
is a low-access, high-control arrangement where you eventually
end up looking like Ceta [Canada Comprehensive Economic and Trade
Agreement] — a more classic free trade agreement, if you are
lucky."

A big problem for those within the Brexit department is that,
although more palatable for business leaders and most MPs, a
softer Brexit based on full participation in the single market
would likely mean Britain having to accept the free movement of
people. This would be a huge risk given how important the issue
of immigration was with voters during the EU referendum campaign
and continues to be to this day.

With this in mind, efforts to negotiate a "soft" Brexit will
likelier be based on maintaining as close ties as possible with
the EU's customs union. The customs union means nations importing
goods into the EU pay the same tariff regardless of which member
states they are importing to, while EU member states all trade
freely with one another.

It is unclear whether May's most senior ministers are united by
this change of approach to Brexit negotiations.

Last week Chancellor Philip Hammond and Brexit Secretary David
Davis had a public
disagreement over a key aspect of Brexit in how long a
transitional phase ought to last. Hammond, one of the
government's more moderate voices, said Britain should be
prepared to accept a transitional deal lasting four years, while
Davis insisted it should last no longer than two.

Hammond also appeared to mock Johnson's "have cake and eat it"
claim during a speech in Germany last week. "A compromise is the
art of dividing a cake in such a way that everyone believes he
has the biggest piece," the chancellor told business leaders in
Berlin.